Sonic Innovations, Inc. - Securities Class Action

Company and Case Information

IMPORTANT INFORMATION | INDEX OF FILINGS | SEARCH

Home

Index of Filings

News and Press Releases

Filings

Decisions

Settlements

Litigation Activity Indices

Top Ten List

Annual/Quarterly Updates

Clearinghouse Research

Articles & Papers

Search

Related Sites

About Us

Local Rules

Sponsors

Register

_______________
Copyright (c) 2001
Stanford Law School

Sonic Innovations, Inc. Conclusion: Pursuant to the terms of the proposed Settlement, Defendants' insurance carriers have paid into an escrow account cash in the amount of $7,000,000 for the benefit of the Class. A hearing (the "Settlement Hearing") to determine, among other things, whether the proposed settlement is fair, reasonable and adequate was held on May 25, 2004. Judge Paul G. Cassell issued orders that same day granting final approval of the settlement, approving the plan of allocation and awarding attorneys’ fees and reimbursement of expenses.

On October 27, 2003, Sonic Innovations issued a press release stating that an agreement in principle to settle the action for $7,000,000 has been reached. The parties entered into a Stipulation of Settlement dated as of February 25, 2004. On March 1, 2004, a motion for Preliminary Approval of the proposed settlement was filed with the court and Judge Cassell signed an order granting Preliminary Approval that same day.

Lead Plaintiffs filed a motion for class certification on May 27, 2003, and on September 8, 2003, the Judge issued an order certifying the class as those "persons who purchased or otherwise acquired Sonic Innovation Inc.'s...publicly traded common stock between May 2, 2000 and October 24, 2000, including those who purchased or acquired Sonic's common stock pursuant or traceable to [Sonic's] May 2, 2000 initial public offering...."

Lead Plaintiffs filed an Amended Complaint on March 16, 2001, which Defendants moved to dismiss on April 30, 2001. On November 9, 2001, the Court granted Defendants' Motions to Dismiss with leave for Lead Plaintiffs to file a Second Amended Class Action Complaint (the "2nd Amended Complaint"), which was filed on December 21, 2001. Defendants' filed their Motions to Dismiss this complaint on February 28, 2002. Lead Plaintiffs filed their opposition to the Defendants' motions on May 7, 2002. On November 7, 2002, a hearing on Defendants' motions was held and on February 11, 2003, Judge Paul G. Cassell issued a Memorandum Decision denying Defendants' Motions to Dismiss the 2nd Amended Complaint. Thereafter, on March 19, 2003, Defendants filed their Answer to the Second Amended Complaint.

A motion for the appointment of Lead Plaintiff and Lead Counsel was filed on December 26, 2000 and a Stipulation to consolidate all related cases was filed on January 2, 2001. On January 29, 2001, the Court granted the stipulation to consolidate the cases into one class action lawsuit, captioned Steinbeck v. Sonic Innovations, Inc., and on January 31, 2001, appointed Lead Plaintiffs and Lead Counsel.

The original complaint charges Sonic Innovations and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Sonic Innovations designs, manufacturers and markets digital hearing aids and hearing aid components. The complaint alleges that from May 2, 2000 through October 24, 2000, Sonic Innovations saw its stock price soar from its IPO price of $14 per share to as high as $25 per share as Sonic Innovations misrepresented the true status of its relationship with Starkey Laboratories, Inc. ("Starkey"), concealing the fact that Starkey, one of Sonic Innovations's largest customers: (a) had millions of dollars worth of Sonic Innovations's product in its inventory that it could not sell; (b) was refusing to pay for product previously shipped to it by Sonic Innovations; and (c) considered the April 19, 1999 OEM Agreement to be void as Sonic Innovations had materially breached the OEM Agreement due to, among other things, materially breaching the quality control provisions. The complaint further alleges that the defendants knowingly concealed the fact that they were informed prior to the IPO that the IC-1 chips the company was shipping to Starkey were defective which would jeopardize its contract with Starkey but would allow defendants to complete the IPO and artificially inflate Sonic Innovation's Q2 projections, its Q2 results and its Q3 projections/results. As a result of defendants' alleged false statements/omissions, Sonic Innovations's stock traded at inflated levels during the Class Period, increasing to as high as $25 on June 20, 2000 and tumbled to $5-1/2 on October 25, 2000 as defendants began to partially reveal the true status of the Company's relationship with Starkey.

INDUSTRY CLASSIFICATION:
SIC Code: 3845
Sector: Healthcare
Industry: Medical Equipment & Supplies

COMPANY/ISSUER NAME:	Sonic Innovations, Inc.
COMPANY/ISSUER TICKER:	SNCI
COMPANY WEBSITE:	http://www.sonici.com

FIRST IDENTIFIED COMPLAINT IN THE DATABASE

Steinbeck, et al. v. Sonic Innovations, Inc., et al.

COURT: D. Utah	DOCKET NUMBER: 00-CV-848
JUDGE NAME: Hon. Dee Benson
DATE FILED: 10/25/2000	SOURCE: Business Wires
CLASS PERIOD START: 05/02/2000	CLASS PERIOD END: 10/24/2000
TYPE OF COMPLAINT: Complaint (Unamended and Unconsolidated)
PLAINTIFF FIRMS NAMED IN COMPLAINT:
Cauley, Geller, Bowman, Coates & Rudman LLP (San Diego, CA) 225 Broadway, Suite 1900, San Diego, CA, 92010 (voice) 619.702.7350, (fax) 619.702.7351, Leo W. Desmond 2161 Palm Beach Lakes Boulevard, Suite 204, West Palm Beach, FL, 33409 (voice) 561.712.8000, (fax) 561.712.8000, stocklaw@bellsouth.net Milberg Weiss Bershad Hynes & Lerach LLP (San Diego, CA) 600 West Broadway, 1800 One America Plaza, San Diego, CA, 92101 (voice) 800.449.4900, (fax) , support@milberg.com _____________________________________________ TOTAL NUMBER OF PLAINTIFF FIRMS: 3

DOCUMENTS FOR THE FIRST IDENTIFIED COMPLAINT

Type:		Date on the document:

REFERENCE COMPLAINT

Steinbeck, et al. v. Sonic Innovations, Inc., et al.

COURT: D. Utah	DOCKET NUMBER: 00-CV-848
JUDGE NAME: Hon. Dee Benson
DATE FILED: 12/21/2001	SOURCE: Business Wires
CLASS PERIOD START: 05/02/2000	CLASS PERIOD END: 10/24/2000
TYPE OF COMPLAINT: Consolidated Complaint
PLAINTIFF FIRMS NAMED IN COMPLAINT:
Milberg Weiss Bershad Hynes & Lerach LLP (San Diego, CA) 600 West Broadway, 1800 One America Plaza, San Diego, CA, 92101 (voice) 800.449.4900, (fax) , support@milberg.com _____________________________________________ TOTAL NUMBER OF PLAINTIFF FIRMS: 1

DOCUMENTS FOR THE REFERENCE COMPLAINT
Amended Class Action Complaint For Violation Of The Securities Act Of 1933 And The Securities Exchange Act Of 1934
Type: Complaint		Date on the document: 3/16/2001
Second Amended Class Action Complaint For Violation Of The Securities Act Of 1933 And The Securities Exchange Act Of 1934
Type: Complaint		Date on the document: 12/21/2001
Stipulation of Settlement
Type: Settlement		Date on the document: 02/25/2004
Notice Of Pendency And Proposed Settlement Of Class Action
Type: Settlement		Date on the document: 03/01/2004
Final Judgment and Order of Dismissal with Prejudice
Type: Order		Date on the document: 05/25/2004
Order Approving Plan Of Allocation of Settlement Proceeds
Type: Order		Date on the document: 05/25/2004
U.S. District Court Civil Docket
Type: Docket		Date on the document: 11/22/2004

OTHER DOCUMENTS

Case Name and/or Number:
Type:		Date on the document:

WARNING AND DISCLAIMER OF LIABILITY:
The information included on this Web site, whether provided by personnel employed by Stanford Law School or by third parties, is provided for research and teaching purposes only. Neither Stanford University, Stanford Law School, nor any of their employees, agents, contractors, or affiliates warrant the accuracy or completeness of the information or analyses displayed herein, and we caution all readers that inclusion of any information on this site does not constitute an endorsement of the truthfulness or accuracy of that information. In particular, this Web site contains complaints and other documents filed in federal and state courts, which make allegations that may or may not be accurate. No reader should, on the basis of information contained in or referenced by this Web site, assume that any of these allegations are truthful.

Go to Search page | Go to Case Index page | Back to Top

�